You can deduct educational expenses only if they are for qualifying education. This is education that meets at least one of the following two tests.

1. The education is required by your employer or the law to keep your present salary, status, or job.
2. The education maintains or improves skills needed in your present work.

You can deduct the expenses for qualifying education even if the education could lead to a degree.

Education that does not qualify. Even if the education meets one of the two tests above, it does not qualify if it:

1. Is needed to meet the minimum educational requirements of your present trade or business, or
2. Is part of a program of study that can qualify you for a new trade or business.

See Nonqualifying Education, later, for more information.

You can use Figure 29-A as a quick check to see if your education qualifies.

Education Required by Employer or by Law

Once you have met the minimum educational requirements for your job, your employer or the law may require you to get more education. This additional education is qualifying education if it is required for you to keep your present salary, status, or job, and the requirement serves a business purpose of your employer. The education must not be part of a program that will qualify you for a new trade or business.

When you get more education than your employer or the law requires, the additional education is qualifying only if it maintains or improves skills required in your present work. See Education To Maintain or Improve Skills.

Example. You are a teacher who has satisfied the minimum requirements for teaching. Your employer requires you to take an additional college course each year to keep your teaching job. You take a course and pay for it yourself. This is qualifying education even if you eventually receive a master's degree and an increase in salary because of this extra education.

Education To Maintain or Improve Skills

If your education is not required by your employer or a law, it must maintain or improve skills needed in your work. Education to maintain or improve skills includes refresher courses, courses on current developments, and academic or vocational courses.

Example. You repair televisions, radios, and stereo systems for XYZ Store. To keep up with the latest changes, you take special courses in radio and stereo service. These courses maintain and improve skills required in your work.

If the courses you take are needed to meet the minimum educational requirements for your work or to qualify you for a new trade or business, they are not qualifying education.

Present work. Education that relates to work you may enter in the future is not qualifying education. Education that prepares you for a future occupation includes any education that keeps you up-to-date for a return to work or that qualifies you to reenter a job you had in the past.

Temporary absence. If you stop work for a year or less and then go back to the same kind of work, your absence is ordinarily considered temporary. Education during a vacation, temporary leave, or other temporary absence from your job is considered related to your present job. However, after your temporary absence you must return to the same kind of work.

Example. You quit your biology research job to become a full-time biology graduate student for one year. If you return to work in biology research after completing the courses, the education is related to your present work. You may even choose to take a similar job with another employer.

Figure 29-A. Does Your Education Qualify?

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Publication 17 | 1998 Tax Year Archives | Tax Help Archives | Home